Stage dharna over incentive, local employment.
Political opposition to Tata Motors' ambitious Nano project seems far from being over. Opposition Congress party's youth wing and Maha Gujarat Janta Party today launched protests separately as well as staged dharna against the Nano project. Leaders and party workers of both the parties have for the first time taken to the streets protesting against the various issues such as incentives given to Tata Motors and local employment in Nano plant.
Maha Gujarat Janta Party (MGJP), formed by BJP dissidents, staged dharna in Ahmedabad. Despite being given so many incentives, Tata Motors is unwilling to employ 85 per cent local people for its Nano plant in Sanand, the party alleged. As per the employment policy of Gujarat government, any private or public sector enterprise, which sets up its base in the state, is required to employ 85 per cent local people in its unit. The cap for managerial level employment is 65 per cent. "If Tata Motors is not ready to provide 85 per cent employment to local people, it should get prepared for the consequences," said Maha Gujarat Janta Party president Gordhan Zadhaphia.
Youth Congress on Friday opposed the incentives given to Tata for Nano project. The opposition party also sought publication of "White Paper" pertaining to the deal.
Gujarat government has reportedly given the Tatas incentives worth over Rs 9,570 crore for re-location of their Nano plant from Singur to Sanand. The soft loan of Rs 9,570 crore that the Gujarat government has offered to Tatas will have to be repaid by them in 20 years at an 0.1 per cent simple rate of interest. However, the repayment schedule will be linked to the VAT outgo on production capacity of 2.5 lakh cars in first phase.
For first four years, Tatas will have to repay the state government at 200 per cent of the gross VAT payments per month. Estimates suggest that Tatas will have to pay an annual VAT of Rs 375 crore to the government based on its declared phase one annual capacity of 2.5 lakh cars. This means, the company will have to pay three times this amount or Rs 1,125 crore to the government as its loan repayment for the first four years.
Thereafter, repayments will reduce to 150 per cent of its VAT payment till the state government recovers 150 per cent of the proposed Rs 2,900 crore investment that Tatas will put up in phase one. This repayment will further come down to 100 per cent of the VAT payment over the following years.
Tatas will invest Rs 2,900 crore for setting up the Nano plant, including the relocation cost of Rs 700 crore. The remaining Rs 6,670 crore will be spent on infrastructure development, including roads and rail, gas pipelines, effluent treatment plant, electricity, water and all that goes in the name of providing infrastructure to the Nano plant.
MGJP president along with other party leaders, Sunil Oza and Sidharth Pandya, were meanwhile detained for staging dharna. Around 100 party workers joined the protest against Tata Motors.
“Throughout the Congress rule in Gujarat, incentives and sops have been encouraged. The volume of the incentive offered by them is a whopping Rs 2 lakh crore. So they have no right to make any allegation. The Nano project is a pride for Gujarat and even the farmers of Sanand understand this. However, the Congress fails to see the growth of state,” Jaynarayan Vyas, state government spokesperson told Business Standard.